§ 3665. Timely payment of claims; interest; damages
(a) An insurance company, including a society and association, is responsible for payment of any consequential damages caused by improper delay in payment or settlement of claims to beneficiaries. For purposes of this section, a beneficiary is any person or entity making a claim against a policy of insurance.
(b) Consequential damages for improper delay are not applicable when a policy provides or a beneficiary agrees to accept periodic payments, unless an insurer improperly delays making such periodic payments.
(c)(1) All payments of claims under policies of insurance shall be made within the time periods provided by this section, unless another statute specifically provides a different time period:
(A) If uncontested, within 30 days after the beneficiary has provided a properly executed proof of loss to the insurer; or
(B) If contested, within 30 days after entry of a final nonappealable judgment against the insurer or settlement between the insurer and beneficiary.
(2) All payments of claims under policies of life insurance shall include interest accrued from the date of death of the insured. The interest rate shall be the rate paid on proceeds left on deposit, or six percent whichever rate is greater.
(d)(1) If an insurer fails to pay timely an uncontested claim, it shall pay interest on the amount of the claim beginning 30 days after a beneficiary files a properly executed proof of loss. The interest rate shall be the rate paid on proceeds left on deposit, or six percent, whichever is greater.
(2) In the event more than 60 days elapse from the date payment on an uncontested claim is due to a beneficiary, or in the event judgment is entered for a beneficiary or the Department or a settlement agreement between the insurer and the beneficiary or the Department is executed, interest shall accrue from 30 days after the beneficiary filed a proof of loss at the judgment rate allowed by law.
(e) In addition to interest, insurers failing to pay claims as provided herein shall be liable to beneficiaries for any and all penalties or costs imposed on them as a consequence of such failure. (Added 1987, No. 106, § 2; amended 1989, No. 156 (Adj. Sess.); 2017, No. 134 (Adj. Sess.), § 5.)